The lazy way to get rich - MoneyWeek Investment Tutorials
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- Опубліковано 11 тра 2024
- Tim Bennett explains the magic of compound interest. Compounding, or or the 'time value of money' - is one of investing's most vital concepts, and is the secret to getting rich without really trying.
Compounding is powerful indeed. I get reminded of that every month when I pay my mortgage.
Jimmy Chang So are you saying that is better to rent your entire life and put whatever is left on a compound interest account?
unrewritable problem with renting is that you are paying someone else’s mortgage and rent is always adjusted for inflation.
My perspective on this after my experience with subject is that you do not have to be THE villian to make millions, you just need to be in the right loop. Just as pointed out you just have to be strategic and innovative. I am not saying I know everything about money laundering but I know that a lot of you already have what it takes to be in the loop to consistently make hundreds of dollars daily. You just need to be in touch with the right people, just like i luckily got in touch with BinaryReap3r who changed my life. I will forever be grateful. Here's his contact Binaryreap3r@gmail.com
@@charliehustle3105 How does that work ?
@@charliehustle3105 so, get a business loan? Aka a mortgage? Lmao
The takeaway from this is that you need to invest for the long term, the earlier you start the easier it is.
So you better start now!
unless there is inflation or currency fluctuations or house price bubbles bursting or or or..
pitchfork All those things change nothing about what he said. You still need to invest for the long term and start early
I think inflation is at around 3% a year at the moment.
jackfordmac not really start earlier easier. Start after economy melts down and invest when it’s starting to recover
people in the comments section obviously don't realize the point of investing:,which is taking the extra money you have but do not urgently need, to generate more wealth later in the future, enough to cover both wants and needs. If you spend all you money right now, you will only get some extra "pizzas", slightly better car, slightly better home, watch more movies, etc.. but if you invest them, compound your earnings, you give up some pleasures right now, but you will have money for when you want a beach house, a Lamborghini... , which you will NEVER EVER get if you spend all you money in the first place, or when you need it, like in emergencies, maybe a close friend desperately need it, family member, broke, sick in hospital, or yourself needing an operation costing $500K to stay alive.
That said, it is best to start investing as young as possible, as compounding is as powerful as the amount of time you have.
Home wasnt a good example cause thats an actual commodity that people sell for hundreds of thousands more somtimes as little as 5 years later these days
you are right.
Well then it's a good thing that I'm 20!
You've got it! Excellent.
"people in the comments section obviously don't realize the point of investing:,which is taking the extra money you have but do not urgently need, to generate more wealth later in the future, enough to cover both wants and needs." You obviously don't understand that people generally have no money to invest, and are subscribing to some fallacious notion that people fritter away their income on gin, or something.
He's showing you how it's done. He doesn't actually expect anyone to do it, or to be able to do it.
Good video.
what?
The question is how to earn percentage of 10% return on investments
***** that shit been returning -2.3% this year
Some P2P lending will allow you to earn 7-10% a year
Luka Henigman where do I do P2P lending? and what guarantee do you have if borrower defaults?
I don't have any guarantee. A quick Google search for, "P2P lending" (P2P stands for "Person to Person") will bring you many results. It is then your responsibility to find the most trusted platforms with the highest ROI. Their sites may say what type of guarantee there is, otherwise contact their support service. Good luck!
S&P was just up almost up 12%... as of a few days ago...
I've known about the power of compounding for a while now, but I always find myself rewatching these videos for entertainment value!
Edutainment
Maybe another takeaway lesson is the effect compound interest has on the receiving end - as in debt and why every effort to avoid it should be expended.
well said, totally agree
Steve Hansen Should not start investing until you are debt free anyway
What's the point of money if you can't spend it? All you're doing is growing your pot until you're 65, then you die and you don't benefit from all that work you did all your life thinking about where to reinvest your money. It's a good concept but really what you're sacrificing is the intrinsical value of money - the pleasure of spending it - for the sake of some lousy 2% rate, which will probably be cancelled out by inflation anyway.
+Dasha Y I agree Lol
+Dasha Y Exactly what I said. lol
+Dasha Y You ARE spending it: on shares of stock. Some people get as much pleasure in that as buying beer, pizza, cars, computers, and vacations. Otherwise I agree with you. If someone doesn't enjoy spending their money on shares of stocks then they're missing out on something else they should be spending the money on.
+Dasha Y The point is you put money away when someone is young.... when they retire they have a nice lump waiting.
much better than being 65 and still broke
I turned $25000 into $1200000 by just the power of compounding. The hardest part was getting the $25000 together. The easy part was growing it.
What did you put it in?
@@aloofmusician856
I put it into a series of companies and not just one company. In the mid 1990s I bought Walmart for about $12 and then sold it in around 2000 for about $60. So that was one of the few companies that I got a good return in a short period of time.
I bought WD-40 after the 2008 crash for about $33 and then sold for about $260.
@@bighands69 Wow, those are some pretty good calls, you've done well! Thanks for sharing.
@@aloofmusician856
The key is to identify companies with good financials such as lower debt, free cash flow, capital returns and when they are at a depressed price point in the marketplace.
One of my most wild returns was Gamestop and I bought it right at the bottom but never expected to get the sorts of returns that came. I was just hoping for 17% returns with a correction closer to their real value.
So buy good companies, buy at a good price and then are willing to wait for the returns.
@@bighands69 Thanks for your advice!! I love people who share their wisdom, I'm quite new to this so it seems like I've missed the ship for so many good companies that have already now become well-established. Thank you
I love the way how you speak. Explained clearly.
Ah yes but so many people never give it a chance to work even at low rates. For example half your return from the S&P 500 since 1925 has been reinvested (and compounded) dividends. Yet many people treat dividends as ready cash instead and spend them. Others pay managers far too much in fees forgetting that a difference of just 1% a year in fees over 30 years on a decent fund is huge! Compounding won't make everyone rich but those who ignore it will end up poor - that I guarantee. Cheers Tim.
You simply keep producing helpful videos. Keep them coming!
The lazy way to get rich.
Roth IRA and/or 401k.
Invest at least 10K/year in Vanguard stock market index funds.
Do this for at least 30 years.
Retire when you want after your 60th birthday.
Yup. Or better yet, max out your Roth IRA and 401(k).
Kevin Kostyk
My strategy very much includes the step your propose.
Yup rich and old.
The problem with that is that you need to be earning a lot to do it. Not only that but you need to have a much higher income than your expenditure and if you decide to get married and have some children, you'll probably struggle to do that even with a good job.
This is a great video. This exactly how I invest my money. I'm on my way to becoming a millionaire.
You are a fantastic teacher and speaker! I hope you are rich and, more importantly, happy! Thanks so much for this.
afnankhokhar - Yes I agree inflation needs to be taken into account to get a real annual return. But even with a lower real return the compounding effect is how you beat inflation over the long term. Interest on interest is the key...Tim.
Anyone willing to give me a small loan of a million dollars?
+Angel Wins work for it
*Personification.
Baby , you deserves more .
+Richard Clarkson no regular job can give you a million unless you own a buisness
+Angel Wins lol
my country charges tax on yearly interest... killing the money-on-money concept!
Every country charges tax on savings and investments but, the only money that should be in a simple, easy access account is your Emergency Fund. All other savings and investments need to be in tax efficient accounts.
I remember seeing a good example one time about compound interest. Lets say you save 2000 per year at 5% compound interest. So first year youll have 2100, second year 4305 etc.
Now at the end of 10 years youll have 26413.55. Which is a 6 &1/2 grand return on your 20g investment.
Now just say you stop saving and a friend of yours starts. On year 20 youll have 43024.80 and your friend 26413.55. By year 30 youll have 70082.88 and your friend will have 69438.41. And thats cause you started early!
A lot of negative comments about not finding stocks that are strong enough to earn 10% interest rate. There are plenty out there. Join a Facebook group that trades stocks and get suggestions. Do some research and you'll be surprised as to what you find. That's how I did it. Love the video, cheers!
you need to invest in a better camera or microphone :)
Cheerio 71 It's poor quality [both microphone & camera]. The lighting is pretty bad too, but at least it's _bright_ 🔆 [as opposed to too dark, which is the _worst_ in a tutorial].
goodgirlsguide lol I have to agree.
Not camera, he needs to buy a microphone, (he could use the apple headphones with mic)
goodgirlsguide it's not that bad.
goodgirlsguide hes obviuosly saving money!
compound interest does work. I just think this guy is just having fun with numbers, you'll be lucky to get 3%
+paul gibson The average annual return for the S&P 500 since its inception in 1928 through 2014 is approximately 10%. If you just keep buying the VOO ETF which tracks the S&P 500 has very low fees you'll get there.
it would be abit of a rollercoaster ride though
paul gibson Yes, higher returns is almost always accompanied by volatility.
Bitcoin
Fair point in this investing climate!
thank u, i thought this just this week, and ur video is showing the concept in my brain. Thank u, nice and easy
great video, really useful stuff.
Who's giving 5% interest?! All I see is .001% on CDs and if he is talking about index funds that's a lot of risk spread out over that amount of time.
stocks ans shares ISA, I put £9500 in one with Legal & General, over 2 years got over 20% so far. But leaving it in for my retirement
that's the hard part... its not unheard of to do five to six percent in peer to peer lending with the lower risk loans, from what I understand... but yeah, its not like there is some account where even that type of return is guaranteed... and even the a and b rated loans, if u invest in those, are still not guaranteed... and it might be relatively easy to get those returns in securities, but ... its still all a gamble no matter how you slice it
Chris Davies what your tranding platform?
what do you mean by invest? specifically does that mean to buy something or just put it in a bank account?
what is the minimum amount to be save for qualify in national bond draw system?
lol assuming 10% fixed growth of you investment is not imaginary, the real question here is really whether a million pounds in you 60s better than 2000 pounds when you're 18
holla vince uhh, yes, yes it is you idiot. At 18 you have your entire earning career ahead of you, at 65 your earning career is behind you. So unless you want to lose everything you worked for for 5 decades, you need to be able to pay for your needs during retirement.
This is the time value of money :)
@@StarWarsomania At 18, you're young free and single and the world is your oyster, but at 65, your life is pointless. An 18 year old can much better spend £2000 than a 65 can spend a million. Also, what are you talking about earning career for; retired people have earnings; they're called pensions?
@@StarWarsomania your brains built like a robot, and not a good one.
5% was a good interest rate 5years ago when this video was made. You're luckily to earn half that now!
Please recalculate with 2% or tell us where to invest to earn 5%!
Invest in mutual funds-get in American Funds
invest in india to get 9%
Mufaddal Bootwala How? ETFs? Sensex is still too volatile...
Just invest in the S&P if you don't know much about investing. Makes you probably more than the bank. Also, you have the benefit of dolar cost averaging.
Stock with dividends, make money on the growth and dividends at the same time.
I actually get it now. The power of compound Interest.
What are good places to start looking to invest?
I opened up a 10k savings today and I plan on putting 1-150 a week and watch it grow slowly but surely.
Except try to find a 5% yield investment these days. It doesn't exist.
Huh? Try the stock market. 30% last year, 9% (without dividends) this year
kurt knapp what website ?
kurt knapp yea but there's always a risk of losing it.Investing in a bank by putting your money in there is the safest way to earn.Slowly but dangerless.
ger kol It's not dangerless. Banks can go under, and usually they only cover up to 80k... but not only that... you are prone to massive erosion from inflation. Your £1 for a pint of milk now, won't get you half a pint in 4-5 years time.
ger kol
what of cash value insurance?
Look at a historical chart of the purchasing power of any fiat currency any you'll cry..
+Scott Stankis fiat is a great car brand indeed
good or bad?
Bad. Fiat currency typically comes with a steady inflation rate that kills any gains from interest.
Scott Stankis
What about considering wages rising a shitload over that same period?
fiat=fix it again tomorrow
Plenty of free compound interest calculators online for viewers to tinkle about with.It really is an eye opener.
Great upload yet again.
Problem: banks only pay about 3% interest. Also bank fees usually take any interest you earn especially on small investments.
And as he said he didn't account for inflation, which generally equals roughly what your interest is.
Where the hell can you get a 10% interest rate?!
Indian banks on fixed deposits give 9.85% interests per annum or in other words per year so in india you can get a 10% interest
social networking information and you don't care about currency exchange risk?? or you plan to move to india?
Everywhere lol... most funds return 10%pa, or if you take a more active role, it's easy to make a lot more.
*****
Ok, which ones?
I've got a database somewhere as I used to help funds raise capital.
I own a property debt fund and to our first £10m round we're giving 12%, second £10m 10%.
So there's one example
10% interest is difficult to come by though :p
Hi there, I get your point, however, banks fixed annual rate is higher than monthly or quarterly interest rates. So, even if you start getting interest earlier and you start compounding you still end up getting less than what you would have made by simply putting it in a bank annually. Now of course a lot depends on the rates the banks provide, but I think they set it up so that the annual rates r better. You r the expert so correct me if I am wrong :) great vids.
Are we talking about £100 a month plus 7% annually or £100 a month plus 7%/12 monthly? Because they result in different values and either way I can't get your exact result when doing it in Excel. Close, but no cigar.
Stock tips from C3PO!
This compound method is flaw and does not get anybody rich. If you save at 15 years old to 75 years old in the US, the inflation percentage is 870% or 8.7x over the last 60 years (1956-2016) according to the US CPI Inflation website. That equals to 1.4% inflation point per year. Your 5% compound interest minus 1.4% = 3.6%. But today there is no such thing as 5% interest except for like government bond. 2% is the going rate right now. So 2% interest minus 1.4% inflation = .6% yield. So if you invested $100 total for year one, you will only get $100.6 back at the end of the year. A 6 cent yield......wow. And then don't forget the 15% taxes on your gain. If you stop investing at year one, you will owe .09 cent on your 6 cent yield = 5.1 cent yield. Holy crap! 5 cents! You can make more money looking for loose coins on the street.
+sixpack samurai Your math/logic is flawed. Interest rates go up and down with inflation, you're trying to argue using the average inflation rate over the last 60 years as compared to the current interest rate, except the current inflation rate is also close to zero (0.9% through the 12 months ended March 2016). Furthermore, the average annual return for the S&P 500 since its inception in 1928 through 2014 is approximately 10%.
"compounding" requires significant capital to acquire wealth within reasonable time. Buy low sale high based on fluctuation trends.. You're all welcome..
Not really. Compounding needs lots of Time, because Compounding relies on the difference over time between a initial sum - the principl - invested and the resulting sum if the principal attracts a periodic return over a period, and that return is reinvested. Compounding is model of exponential growth. That is something that isn't guaranteed when investing. Savers can benefit from compounding but, only over short periods of time. Thank you.
Serious question, but where can I put my money in right now. In order to get a million or more by the time I'm 50? I am currently 25 years old. Worried about the future, don't believe retirement will exist by then. What can I do now to take care of myself, family, and future? I could put about 300 a month away into something
Try putting your money on fixed deposit on a rate of 11% per year
Thanks Steve!
marry rich
And who is offering 10%+ so I can go there?
Thanks dude, instead of buying a packet of butter for five pounds, I waited 7.2 years to earn ten pounds that year but unfortunately butter had doubled in price by then :-)
Yes of course its from earnings. Where else can it be from? Well, it can borrow money too, some companies are more in debt than profitable and still give dividends (I have stocks in one atm).
Yes, the companies stocks go down because it just gave away its money, so the company's "worth" has decreased. But its also because some people just buy to get the dividends and then sell the day after they get it. But most of the stock price is speculative, so the stock can bounce up soon after.
yes many companies come and go but there are stocks that have been paying solid dividens for 50+ years or more
For example: Emerson, Coca Cola and DuPont have been around even longer than 1925 and have made a positive return for their stock holders despite all of the recessions that have occurred since the early 1900s and the recent one we have just gone through.
ITS HARD TO EVEN GET 2 PERCENT SO USE MORE REALISTIC INTEREST RATE.
lol WHAT???
Thats the reality.
Stephen Williams With the banks, sure. Take a look into investing in the stock markets, pay attention to a companies capital gains and dividend yield.
Stephen Williams Hes not talking about the return on a savings account at a bank. Its a generic return rate could be stock market returns futures options what have you.
+Adam Bates Unless you invest just before a major crash ...
It is just math 101. Nothing related to get rich
Lol. You mean getting rich quick. But that rarely happens.
Tim, youre a genious ;) i love every video its very informative.
not bad, but I personally liked dividend capturing, can you cover that strategy?
This is bogus! I opened my Excel spreadsheet and played with the numbers a bit. So instead of 100, I invested 1000 a year, and then added 1000 every year and compounded over 20 years for 5%. I ended up with dismal 34000 after 20 freaking years!
That's not the way to make money!
I believe you did the math with a 5% flat rate compounded annually. I've never figured out how to make excel do real compound interest Interest, but if you change the Interest to compound monthly, and invest the 1000 a year in 83 dollar chunks every month. You can actually get just under 37K. Unfortunately compound Interest only really makes you rich if your using made up return rates like 10% and have an entire life time.
See if you can find a free amortization spreadsheet online. Some even include a randomizing function to simulate fluctuations in the markets. In this way, you will see how changes in the market impact your investment long term. It can be a very sobering set of calculations which shows you how much difference a "less stable" investment makes in your long term return. Good Luck.
If only you could make 5% a week and compound it for 5 years.. oh wait you can. :D you're welcome.
Because you only did it for 20 years. 20 years isn't considered long term enough for compounding to take effect
Anything about getting rich easily is probably an easy way to do the opposite.
+III Riddle very profound
okay but this is actually true, the only problem we need to solve is how do you start .-.
III Riddle find investments. small ones and big ones. institutional investments and business investment. crowd funding, funding circle etc so many platforms. Just got start. start with education in money via you starting to read/listen to book/audio books e.g." richest man in Babylon" (free on youtube)
Then getting on with it.
Do cash NISAs do the same thing with compounding as in this videos?
Thank you Sir. ... Great content. .. and love the accent (British) :)
i live in the united states so the answer to your question is yes...yes I i do want a free lunch
who wants a million when your 65
shango thomas I suppose its better then being broke at 65?
***** Correct..you can retire a lot younger then 65 if you start young keep adding each year and reinvest the dividends..also not that hard to even average 10% if you get 5% in dividends then you are half way there!....a good solid company should easily grow by 5% per year also....for myself I like to aim for 12-15% returns :)
***** Vanguard is ok and I would keep adding money to that!....15% is more of an average over time!..so one year it might be 7% then the next 25% but over time you get a compound average of say 12%+...you just have to be a bit more active and do research on stocks and weed out the good ones!
***** ***** - All I see is 2 vikings arguing over plunder! Good to see nothing has changed.
Ryan just admit it...you want to join us on our next raid...:)
How does it work if you are investing in common stock? Only with dividends?
When you buy something, even online, if you may be able to choose to get an invoice instead of paying by credit card. The company you bought from, say Macy's, doesn't want to chase you down to get you to pay. So another company pays Macy's right away and buys that invoice, and its them who sends out reminders to pay and add on fees if you don't and eventually chase you down.
They are not "banks" in the regular sense, but financial institutions. There are several in Sweden.
I get your point but at 14 yo where would one get £2000 but then find interest rate of 10%?
This video is not really helpful but thanks anyway.
pretty much!!! far from any reality. But it explain the concept of compounding it seems he could not resist to impress on these unrealistic examples.
if you count dividends and capital gains, 10% in the stock market is possible.
Maybe not from 14 but at 16 you can get a part time job making 10k per year.
Manuel Medina and that's a bear minimum I plan on working with family for 2 years for 16k annually give or miss a thew thousand depending on work.....I hope to save all this money and buy shares in multiple companies and find what one I'm comfortable with..
Look at funds, Trusts or stocks. AXA Biotech fund has returned c400% since launching. Roughly 60% per annum.
you're lucky to get %3 interest rate
Nicky Halpin Not true, I invested in two stocks last year and my growth for each was 20% on one and 17% on another. Just do some digging.
yeah and i bet ur with fairygodmotherbanks arent you
Nicky Halpin I have no idea what that means
its actually beyond easy if you do only a little bit of research. 10-20% is very achievable if you know where to put your money
Well... I'm up like 9% on my stash
Here's $5. Try this out:
get.stashinvest.com/quentindfs9e
idk about uk and usa but in india , you can easily get 40 to 60 % return on stocks per year. In 2017 i captured 3 multibeggar companies in which 2 grew more than 80 percent and 1 grew by 200% . i think BRICS countries have so many companies with so better valuation than US and UK.
What investment gives you compound interest? Dividends? Those are one off payments? Bonds same like interest? What gives you compound and that too at 5%?
The calculation you're doing are wrong according to logic and financial mathematics. You can't divide 5% by 4 to get your trimestral rate. This goes against logic because if you start from 100 pounds, in the first trimester you'll be at 101,25 pounds, but then at the end of the first semester, you get 101,25*1,0125=102.515625 pounds ending the year at 105.0945 as you say in the video but this is not if you're offered 5% annual rate, this is if you're offered a 1,25% trimestral rate.
According to financial mathematics, if you're told you get 5% annually, this means you get trimestrally 1,05^(1/4)=1.0122722 or 1,22722%.
I know this video is old but to avoid getting people confused you should erase this video.
Hope you'll do the right thing.
Best regards,
Toni
lets see your portfolio if this actually worked. you cant find investments that will give back 5% anymore. its 2016 not 1960
My portfolio performance over 2016 was around 20%
If you do enough research, times can be better than 1960..
I hope you can make it work!
Ro1and Hi, what your trading platform?
What are you on about? You can literally earn 100% in a month when investing in crypto. You can also earn like 500% in a month if you trade with leverage.
Lol blue chips give around 10% with little risk
If you do trading, you can easily make more than 5%. The best traders can make 30% or more returns a year, The top trader in etoro made 200++% returns the last 12 months
love your videos. so concise, great info and funny :-)))
Good sound advice well explained. Thanks
10% interest haha
kparker1ful Banks at this moment won't give you that, but P2P lending is closer to 7-10% annual ROI.
Nobody gets rich this way.
Every multimilionare have...
only if they were already born with a couple million.
No just think about it. If u save first like 1k and u put every month to the same account 150$ after 15year u have almost 100k and u have earn almost 30k free money(what u didint have without saving)
If u have good income and u put every month 550$ to that account and wait same 15year u have almost 300k then and u have earn like 100k. In 40year with 550$ monthly saving u have milion after that 40year
Having over a million by the time you're old and weak and about to die is not really my definition of "getting rich".
If u have money to put 10k in month in that saving account it would take under 6years. put i think u dont have 10k every month
Excellent teaching. Now it is clear to me how to become a millionaire!
I love ur video tutorials sir...keep it up
This is the jew way to get rich
In China right now the rate is 5% . You put 1 million in the bank then it’s 50 thousand interest , but cause the gdp growths been sliding for years , high rate like this won’t last for too long ...
His look and the way of teaching style reminds me of the Walter White in Breaking Bad. I love your videos 😍
Thanks for the video - very useful!
But where can I find a way to receive compounded interest for my money ? Savings accounts in the UK hardly give you anything
I have just seen this video, and one question comes to my mind. What are those people paying the interest doing with my money? I think the answer to this is what I would like to do instead of having intermediaries, I hope you can answer this question.
does this also wrk with amurican money or just poundz?
we call it compounding interest... Interest earn interest...time will come, you will live in interest. Nice video.
Thanks again Tim.
lol this is a stupid question but do put your money in a normal debit account or ssavings account?
I don't think that's why.
The short of it is that the investors own the company and if the owners want dividends the company is obliged to give it.
Great video! Accurate figures with simple maths.
I'm saddened to see the top few comments degrading this video. This video shouldnt be titled "the lazy way to get rich" as you get lazy people watching. If you dont want to put in the effort to save for your future, don't watch this video.
How often do you make money though? I've been generating monthly payments for a whole year after downloading Household Wage Project (GOOGLE IT). It wont be available for much longer though...
Unrealistic rates, inflation treated like air resistance, fees also ignored. Why not do some regular long term investing?
Charges aren't the only cause of earnings reduction; you should also take under consideration the fact of inflation. For instance, if the annual deposit rate is 7%, charges are 4% and the inflation rate is 4%, you will lose the real value of your money by roughly 1% per year.
what do you have to do to avoid the charges?
Are any cost involved at all?
so where can I invest money to recieve compound interest?
Also, another thing I have realized is that the interest rates banks pay helps you maintain the real value of money adjusted to inflation. So in essence all you've done it make sure you don't lose the value of say $100 over the course of the year. So my question what other "lazy" ways are there which can help u add to the value of your money rather than simply maintaining it...--there must be something - Help. :)
Is that the dividend yield percentage?
The lazy way to get rich, without doing any work?
I all ready like it!
Thanks for your video. I am watching all of your videos.
so the only way to assure 0% principle loss is the TDB8150 by TD Waterhouse/Direct Investing?
No banks don't pay 10%, but you don't invest your money in a bank account. Banks are for storing money, not investing.
There are times when bonds have paid 10%, (70's,)
The average return for all of the 1900's for the S&P 500 was over 10%, (dividends reinvested.)
If your smart, you can beat the S&P.
And this is a simple concept that most people ignore, and yes understanding it can make you rich. Especially if you learn to double the S&P as Buffet, or Lynch did.
problem with this is simple. First of all, the assumption that there is no risk in your investment, which is possible but the return will be very low, in addition, inflation had to accounted for, 60 years ago a pound bought you a lot more than it does now. Finally and most importantly,is WHEN do you want to spend your money. Do you wanna spend it when you are 65 old and grey , or when your young on holiday with your mates or new gf or whatever. Me personally want to enjoy life while I am young, of course you need a pension,but dont save up too much, money decreases in value these days, and you wont have any energy to spend it anyway, instead live out your fantasies as much as possible (but avoid debts)
This is the realest quote I've read in a long time and the best point made life is an adventure to live. Do it while ur young and can do anything rather when ur so old u can't really enjoy it and u just go to sleep everyday.
Were can I find investment tools like this that will pay out compound interest?
How many companies in the S&P500 are still around from 1925? Indexes are missleading, because they replace companies that go bust or do badly, so they do not reflect the losses.
You can put your money in a instant access savings account. 5%-10% of your money that you need quick for repairs, insurances or any other bill. The rest of your money you can invest mid to long term. (stocks, bonds or more risky assets like Social Trading, Crowdfunding etc.)
You also should start a monthly savings plan. Time will always help you :)